Statutory audit of financial statements in Ukraine
A statutory audit is an independent audit of the annual financial statements under International Standards on Auditing, required by Ukrainian law from medium and large companies, securities issuers, banks, insurers and several other categories. The statements and the auditor’s report must be published by 30 April or by 1 June. We check whether your company falls under the requirement, help you order the audit, prepare the statements and documents, and agree the timeline and the report format in Ukrainian and English.
A statutory audit is required for public interest entities, medium and large companies, public joint stock companies and other entities named by law. They publish the annual financial statements together with the auditor’s report on their own website. MK Audit has worked since 2000 and is a full member of the international association DFK International, based in Kyiv.
What a statutory audit is
A statutory audit covers the statements of entities that must publish or provide them to users together with an auditor’s report (Art. 1(1)(16) of the Law of Ukraine No. 2258-VIII on Audit of Financial Statements and Auditing Activity). The obligation comes from the law, so it cannot be postponed.
The audit follows the International Standards on Auditing (ISA) as published in Ukrainian (Art. 13 of Law No. 2258-VIII). The auditor tests whether the statements fairly present the company’s financial position and results under Ukrainian standards or IFRS.
The auditor’s opinion or a disclaimer, a statement that ISA were applied, a conclusion on whether the management report is consistent with the statements and, where relevant, a material uncertainty related to going concern (Art. 14(3) of Law No. 2258-VIII).
Who needs a statutory audit in Ukraine
Issuers whose securities are admitted to trading on a regulated capital market or were offered to the public, banks, insurers, private pension funds, other financial institutions (except micro and small ones), and every large company (Art. 1 of the Law of Ukraine No. 996-XIV on Accounting and Financial Reporting).
At least two of three indicators: total assets above EUR 20 million, net revenue above EUR 40 million, average headcount above 250 employees (Art. 2(2) of Law No. 996-XIV).
The company exceeds the small company limits on at least two criteria: assets above EUR 4 million, net revenue above EUR 8 million, more than 50 employees. The upper limit for a medium company is EUR 20 million in assets, EUR 40 million in net revenue and 250 employees (Art. 2(2) of Law No. 996-XIV).
Public joint stock companies publish audited annual statements regardless of size. For issuers whose securities are admitted to a regulated market or were offered to the public, this follows from their public interest entity status (Art. 14(3) of Law No. 996-XIV).
Natural monopolies on the national market, extractive industry companies, parent companies of large groups, micro and small financial institutions and private pension funds (Art. 14(3) of Law No. 996-XIV). Other laws may add their own requirements, so we check each case against your documents.
Micro and small companies with no other grounds do not need a statutory audit. Owners, banks and buyers of a business often order a voluntary one instead: see audit on request.
How to measure: use the figures at the date of the annual financial statements for the year before the reporting year; two of the three criteria are enough. Euro amounts are converted at the average official NBU rate for the year. Newly established companies use the figures at the date of their annual statements, and a company moves to a new category once it has not met the criteria of its current one for two years in a row. Check the criteria in detail.
Deadlines for publishing audited statements
Public interest entities (except large companies that are not issuers), public joint stock companies, natural monopolies and extractive companies publish annual statements with the auditor’s report and the management report on their website (Art. 14(3) of Law No. 996-XIV).
Large companies that are not issuers, medium companies, micro and small financial institutions, private pension funds and parent companies of large groups (Art. 14(3) of Law No. 996-XIV).
Corporate income tax payers that publish audited statements file those annual statements with the tax authority (para. 46.2, Art. 46 of the Tax Code of Ukraine).
Published annual statements and the auditor’s report must stay on the company’s website for at least six years unless a law sets a longer period (Art. 14(7) of Law No. 996-XIV).
The auditor then has time to plan, attend the year-end stock count and perform part of the work before the books are closed. If you start in March or April, only a few weeks remain before the publication date, and that is the busiest season for audit teams.
The statutory auditor is appointed by the general meeting of participants or shareholders, the supervisory board or another body named in Art. 29 of Law No. 2258-VIII. Public interest entities must first run a selection tender, so they should start even earlier.
What you receive
A report with the auditor’s opinion on the annual financial statements, prepared under ISA and Art. 14 of Law No. 2258-VIII. This is the report you publish with the statements.
A separate document for the director and the owner: weaknesses in accounting and internal control noted by the auditor, with recommendations for the next year.
The main report in Ukrainian and, where needed, an English version for a foreign owner, parent company, bank or investor.
A package for publication on your website and filing with the tax authority. If you report under IFRS, we help with iXBRL filing.
Four steps from request to report
Within 1 business day we tell you whether your company needs a statutory audit, the publication deadline and the likely scope.
We send the list of documents and access we need and agree the timeline, the stock count date and your contact people.
The auditor tests the statements, source documents, estimates and disclosures. Questions are discussed with your accountants as the work goes on.
Auditor’s report, management letter, an English version if needed and a package for publication and filing.
Frequently asked questions
Does my company need a statutory audit
Look at last year’s figures: total assets, net revenue and average headcount. If two of the three exceed the small company limits (EUR 4 million, EUR 8 million, 50 employees), the company is medium or large and needs an audit. Issuers, banks, insurers, public JSCs and the other categories listed above need one too. Send us your statements and within 1 business day we will tell you whether the requirement applies.
When should we start
Ideally before the end of the reporting year, so the auditor can plan the work and attend the stock count. Public interest entities also have to run a tender to select the auditor, so they should start earlier.
How long does the audit take
It depends on the volume of transactions, the state of the books and whether you report under IFRS. We agree the timeline at the start so the report is ready for your publication date: 30 April or 1 June.
How much does a statutory audit cost
The fee depends on company size, the number of transactions and divisions, the reporting framework, the report language and the deadline. Commercial proposal after we review the engagement.
Can we combine the audit with bookkeeping support
You can order bookkeeping and preparation of statements for the audit from us: see outsourced accounting. Independence rules apply: an auditor does not audit books they kept (Art. 10 of Law No. 2258-VIII), and for a public interest entity the same auditor may not keep the books or prepare the statements (Art. 6(4) and Art. 27). We split the roles at the start and propose a set-up that complies with the law for your category.
Can the report be in English for a foreign owner
Yes. The main report is in Ukrainian because that is the version you publish, and we prepare an English version for the owner, parent company, bank or investor abroad.
What happens if the statutory audit is not done
Without an auditor’s report the company cannot publish its statements in the required way. Breaching the rules for publishing statements with the auditor’s report carries a fine under Art. 163-16 of the Code of Ukraine on Administrative Offences of 1,000 to 2,000 tax-free minimum incomes (UAH 17,000 to 34,000), and 2,000 to 3,000 (UAH 34,000 to 51,000) for a repeat breach within a year. Failing to file these statements with the tax authority by 10 June is penalised under para. 120.1, Art. 120 of the Tax Code.
Order a statutory audit
Tell us about the company and the reporting year, we reply within 1 business day.